This copy is for your personal non-commercial use only. To order presentation-ready copies of Toronto Star content for distribution to colleagues, clients or customers, or inquire about permissions/licensing, please go to: www.TorontoStarReprints.com

Draft Day: Drake embraces Andrew Wiggins, but will brands?

When Vaughan native and basketball prodigy Andrew Wiggins made it official on Monday that he would enter this year’s NBA draft, he also sealed a big payday. The league’s collective agreement mandates that this year’s top draft pick will earn $4.6 million as a rookie, and even if Wiggins slips to the fifth spot he’ll make just over $3 million.

But endorsement income is another matter. Online rumours rippled last October claiming that Adidas intended to sign Wiggins to a shoe deal worth $180 million (U.S.) over 10 years (those stories may have been the product of an internet hoax that gained mainstream media traction).

Vaughan native Andrew Wiggins dunks during a second-round game in the NCAA college basketball tournament last month. (Jeff Roberson/The Associated Press)

But now that his one-year college career is over, what does the endorsement landscape actually look like for a player who has highlighted both his enormous potential and the skill gap between himself and superstars such as LeBron James, to whom he has been compared?

Experts say that his earning power depends who drafts him.

“If I’m a brand I want to know where he’s going to play. That would have an impact on how much his value would be to me,” says Matt Powell, an analyst at the sports retail analytics firm Sports One Source. “It’s taken (Oklahoma City Thunder star) Kevin Durant six years to get to a place where he was selling a lot of shoes. Part of the reason is that he was playing in a small market.” Nike features a line of Durant-branded athletic shoes.

Sports marketing professionals point out that Wiggins’ profile suffered when his college team, the Kansas Jayhawks, suffered a second-round loss in the NCAA men’s basketball tournament. Reaching this weekend’s Final Four championships, with its large television audience, would have showcased Wiggins to both hardcore and casual sports fans.

But the 19-year-old player still receives off-court exposure.

In his new single “Draft Day,” Toronto native and hip hop superstar Drake mentions both Wiggins and Johnny Manziel, a Heisman Trophy winner who is expected to be selected high in this year’s NFL draft.

But while Manziel signed an endorsement deal with Nike even before next month’s NFL draft, Wiggins may benefit more from waiting to sign such an agreement.

“From company standpoint, maybe you get a discount if you sign a player before the draft,” says Miami-based sports attourney Darren Heitner. The player and his agent “have to calculate the potential risk and reward. Do you go the safer route or do you wait?”

In 2007, Nike signed Durant to a seven-year contract worth $60 million, but that deal came after Durant emerged as the undisputed best collegiate player in the U.S.

In 2010, Reebok agreed to a five-year, $25 million deal with first pick John Wall of the Washington Wizards, though by last winter Wall had ditched them for Adidas.

But brands now prefer to wait until a player proves his marketability before signing him to a monster shoe deal. Chicago-based marketing agent Quency Phillips points out that Adidas signed Chicago Bulls star Derrick Rose to a 13-year, $185 contract, but only after Rose’s third NBA season

“There’s no need to overpay for a basketball player who has not stepped on the court,” says, Phillips, president of the Que Agency.

According to Sports One Source, basketball shoe sales totaled $4.5 billion in the U.S. last year, with Nike and its Brand Jordan subsidiary controlling 92 per cent of that market. Adidas earned a 5.5 per cent market share, while Reebok and Under Armour combined for just over two per cent.

Signing a superstar could help a brand grow those numbers, but such deals aren’t always worthwhile.

Powell points out that Nike pays James $19 million annually, while James’ signature shoe model brings in roughly $300 million in retail sales, or $160 wholesale. He says shoe companies’ marketing budgets typically equal 12 per cent of wholesale sales, which in Nike’s case would mean spending about another $19 million to promote the line.

Set against that $160 million in wholesale sales, Nike’s $38 million investment in James and his line is a bargain, but Powell says giant contracts with less visible players wouldn’t pass a similar math test. Durant’s signature model shoe brought in $175 million in retail sales last year, but Powell says it might not qualify as a success when factoring a contract that, incentives included, pays eight figures.

So until Wiggins is popular enough to generate $300 million annually in sales, don’t look for a shoe company to give him a LeBron-sized deal.

“If you’re trying to put a (profit and loss formula) on a player, this is a smart way to look at it,” Powell says. “We haven’t seen a major rookie shoe contract since Wall, and that was an outlier.”

More from The Star & Partners

LOADING

Copyright owned or licensed by Toronto Star Newspapers Limited. All rights reserved. Republication or distribution of this content is expressly prohibited without the prior written consent of Toronto Star Newspapers Limited and/or its licensors. To order copies of Toronto Star articles, please go to: www.TorontoStarReprints.com